Understanding mortgage servicers

Sometimes, after you start making mortgage payments, you will be notified that you need to start writing checks to a different organization at a different address. This change usually occurs for one of two reasons: the lender has sold your mortgage to someone else, or has hired another company to manage your account for them.

The entity in charge of your account maintenance is called a mortgage servicer. Mortgage servicers are required to process your mortgage payments. Unless your servicer is somehow incompetent (something which is quite rare), their identity matters very little, at least for your purposes.

Of course, you will need to remember to send the check to a new address, but servicers are usually pretty forgiving for the first few months after the switch.

Rest assured that the important things would stay the same. A new mortgage servicer cannot alter the terms of your original agreement. That means they can’t raise your mortgage payment, your interest rate, or otherwise change your contract.

So what does account management involve? For the most part, the answer is paperwork. Your servicer must send you bills, statements, and annual summaries relating to your account. Note: Be sure to hang on to these summaries. Ultimately, they will make your life a lot easier at tax time.

Furthermore, your servicer will be the ones to contact you if your mortgage payment is late or short. If you are having financial difficulties, be forthright so that your servicer can help you as much as possible.

Whoever your servicer may be, it is important that you maintain records regarding your account. That way, if any dispute arises, you will be prepared to sort it out without much additional effort.